Deloittes escapes action over 'horror story' college finances

Deloitte & Touche is unlikely to face legal action over its role as auditor of Halton College despite a ‘horror story’ of financial oversights and ‘weak’ audit controls.

In a report released last week, the Commons Public Accounts Committee said the governing body of the college had decided not to take complex legal action against Deloittes over ‘shortcomings’ in its advice to the Widnes-based college.

Halton, one of England’s largest further education colleges, claimed almost £14m more in grants from the government than was justifiable, costing the taxpayer £1.8m.

The committee blamed a ‘weak’ audit process and poor managerial controls for the financial irregularities. These included extravagant spending – particularly on overseas trips by the principal and deputy principal – costing more than £200,000.

The principal and deputy principal were suspended in May 1998 but continued to receive full pay for nearly a year.

In April the government introduced rules for the disclosure of travel expenses by staff in colleges’ annual accounts.

The National Audit Office, which is investigating six other colleges concerning allegations of overclaiming grant money, has warned weaknesses in controls at Halton College could exist elsewhere.

Committee chairman David Davis said: ‘This is the latest in a succession of horror stories from the education sector that have cast doubts on management abilities and their arrangements for governance.’

‘We are studying the PAC’s report and are surprised at some of its comments,’ said a Deloittes spokesman.